File now or wait

[mysterie91]

I spoke with our attorney yesterday and she is "strongly advising" that we wait to file Ch. 7 until after we get our tax return back and spend it.

She said that the trustee and the judge in our district WILL take our entire tax return for the year if we file now - about $2K. She said it is a gamble to wait as we could get served in the interim and if we do then we would need to file rigt away and suck-up the loss of the tax return. We have not paid CC's since August and have not used them either. Chase has been very aggressive in their collection efforts and she confirmed that she sees from experience that they would probably act soon.

She is also running our numbers through the new means testing and numbers that become effective Jan 1, 2008 to see if we will be OK on that aspect to wait. If we wait we also need to re-take the initial counseling and pay another $100 for that.

I am very torn though. I really want to file and stop the harrassing calls, take our lumps and get on with our life. But I also don't really want to give up my tax return either. Giving up $2K when money is so tight seems crazy but giving up $2K to wipe out $40K of debt seems like OK.

Any advice? What would you guys do? Guess I am just curious to know what others think. Thanks!

[tay666]

Look at it this way.
Even if a creditor decides to try and get a judgement.
You are look at at least a month until there is really anything to worry about.
I mean, ever if you got served today.
You still have like 3 weeks until the hearing.
Then, even if they win, they still have to do the paperwork to actually put a garnishment in place.
By then you are into 2008.

Also, if you look in the creditor section of this forum you will find ways to drag out the time it takes for the creditor to get a judgement.

Sure, it's a hastle, and it would be nice if it is all over and done with.
But you have to be smart with your money. Why give up money that you don't have to?

[monkatom]

I am in the same boat. Lawyer says wait to get tax return and spend then file but i am worried since we recently sold a car and are using the money for property taxes, insurance and lawyer fees he says to get the tax return and buy clothes and exempt furniture but I am worried that trustee or creditors will cry fraud ove rthis. I feel i would rather let them have tax return about 10K to wipe out 121K in debt. mysterie91 let me know how it goes as I am swaying back and forth as well on when to file.

[mysterie91]

I am in the same boat. Lawyer says wait to get tax return and spend then file but i am worried since we recently sold a car and are using the money for property taxes, insurance and lawyer fees he says to get the tax return and buy clothes and exempt furniture but I am worried that trustee or creditors will cry fraud ove rthis. I feel i would rather let them have tax return about 10K to wipe out 121K in debt. mysterie91 let me know how it goes as I am swaying back and forth as well on when to file.

I am following up with a bunch of questions to the attorney and will update once I hear back. I wanted to quickly add that our attorney specifically stated that the only things that we could spend that tax return on were necessities like groceries, paying on child care, electric and gas, student loans, tires for the car. She said we cannot pay things like dental, clothing, gifts, etc. I would be careful if your attorney is advising furniture and clothes as the trustee may see that as non-necessity items and ask for the cash.

[monkatom]

yeah thats what scares me. attorney said clothes are exempt and once furniture is used it loses a lot of value. I would rather keep old clothes and furniture and make the trustee happy then be put under a microscope for some clothes and furniture especially since we sold an asset before filling BK.